Global indoor farming technology market is projected to witness a CAGR of 13.72% during the forecast period 2024-2031, growing from USD 35.07 billion in 2023 to USD 98.10 billion in 2031. Indoor farming technology is gradually becoming popular among consumers and gaining momentum in the world, with more people getting indoor farms installed at their places. In April 2024, TrustBIX Inc. announced that it signed the first orders through its wholly owned subsidiary Alberta Food Security Inc. and received the initial deposit for the sales of the indoor farming which amounted to about USD 650,000. This market growth is driven due to various factors such as changes in the climatic conditions which make it difficult for plants to bear extreme and severe conditions such as high amount of rain, storms and drought. Other factors, such as year-round production due to the controlled environmental conditions, which allow the proper growth of the plants regardless of the external weather conditions and reduction in the transportation costs and carbon footprints as the crops can be conveniently grown closer to the urban centers, driving market growth.
As indoor farming technology offers space efficiency, technologies such as vertical farming help in the efficient usage of the space especially in the urban area. It is because vertical farms can be easily set up in warehouses, purpose-built structures, and shipping containers.
Additionally, the surge in the usage of indoor farming technologies can be observed as these enclosed environments are easier to protect from pests and diseases, reducing the need for pesticides. Indoor farming technology has gained popularity among farmers as the advanced systems used in indoor farming minimize water and nutrient usage, thereby conserving the resources.
The only drawback of indoor farming technology is the setup cost and investment in the technology is expensive. Thus, the market is offering an opportunity for the key players to bring cost-efficient indoor farming solutions for the consumers, hence, helping them in gaining a competitive advantage among other manufacturers of the technology in market.
Higher Yields Using Limited Space
Scarcity of arable land, mostly due to urbanization, population increase, and environmental degradation, is rapidly pushing consumers toward technologies used in indoor farming. In fact, traditional farmland will soon become a rare commodity, especially next to urban centers, and indoor farming offering a solution. It could produce fresh and local food with the minimum land-use.
Indoor farming technology offers ways of farming any crop in compact spaces that can be used to produce food within cities where the land prices are high, or the land is unavailable. This transfigures the constraint that currently exists with respect to land and reduction of transportation costs and carbon footprint associated with long-distance distribution of food. While the advancement of technology for efficient, sustainable, and space-saving technologies for indoor farming attracts interest in the face of increasing land shortage, reasons are driving tremendous change in farming practices.
In October 2023, the UN Convention to Combat Desertification (UNCCD) announced the launch of its first ever Data Dashboard compiling national reporting figures from 126 countries from the world which highlighted that land degradation is advancing at an astonishing rate across all regions. The study shows that Eastern and Central Asia, Latin America and the Caribbean regions are experiencing the most severe degradation which is affecting at least 20% of their total land area. While western and southern Asia, sub-Saharan Africa, Latin America and the Caribbean experienced land degradation at rates faster than the global average.
Water Conservation to Drive Market Growth
Indoor farming technology significantly contributes to worldwide water conservation through drastic reduction of water usage compared to conventional outdoor farming. Popularly employed indoor farming techniques include hydroponics and aeroponics, which can take up as much as 90% less water than that used in soil-based agriculture. Such systems re-circulate both water and nutrients, hence producing minimal waste. The water, together with the nutrients, is uniformly and directly given to the plant roots; hence, runoff and evaporation losses common under open-air farming are obviated. In addition, a lot of indoor farms make use of closed-loop systems, filtration, and recirculation of water to conserve this element.
According to the Food and Agriculture Organization, at least 50% of the global population i.e., 4 billion people deal with water shortage at least for a month in a year. Also, estimations coin that by 2025, 1.8 billion people are expected to witness absolute water scarcity.
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It therefore provides an alternative sustainable means for indoor farming in water-scarce regions through the production of crops using a fraction of the amount of water needed for crops in conventional agriculture. Moreover, as stated by the United Nations, merely 0.5% of water on Earth can be used and is available as freshwater. Thus, water efficiency in this way supports food production in a sustainable manner and helps conserve freshwater resources amidst rising environmental challenges across the globe.
Aeroponics to Show a Faster Growth
Aeroponics has various advantages over other indoor farming technologies due to its efficiency and potential for higher yields. In aeroponics, the roots are suspended in the air and misted with a nutrient-rich solution to optimize the exposure of the roots to oxygen. Since the amount of oxygen available to the root is increased, the rate at which nutrient uptake happens increases, therefore resulting in a faster growth compared to hydroponics, where roots are submerged in water.
As aeroponics does not maintain both plant and fish ecosystems, this system is much simpler than aquaponics. Moreover, compared to hydroponics or aquaponics, aeroponics applies very little water since it involves misting, which is a very efficient process and offers very minimal wastage while delivering nutrients to the roots. Plants are therefore much healthier since the risk of soil-borne diseases and pests is reduced due to the absence of a growing medium. Together, these advantages make aeroponics a highly efficient and easily scaled option for indoor farming.
In March 2024, Eden Aeroponics developed The Eden and The Eboo indoor vertical aeroponic garden which seeks to help in saving the planet. The project aims to bring the future of home gardening in shared community spaces and homes.
North America to be the Fastest Gowing Region in the Forecast Period
North America is a pioneer in indoor farming technology due to a combination of factors, including advanced technological infrastructure, significant investment in agricultural innovation, and the need to address challenges such as land scarcity and climate variability. The region’s strong research and development capabilities have fostered the creation and adoption of cutting-edge techniques such as vertical farming, hydroponics, and aeroponics. Additionally, the growing consumer demand for locally produced, sustainable food has driven the expansion of indoor farming. Government support, along with the presence of leading agricultural tech companies, has further solidified North America’s leadership in this field.
In March 2024, Cox Enterprise launched Cox Farms which is one of the largest greenhouse growers in North America. Cox Farms includes indoor farming companies, Mucci Farms and BrightFarms, and aims to continue to pursue additional ventures and investments in the indoor agriculture space. With these brands, Cox Farms is harvesting 360 million pounds of produce annually.
Future Market Scenario (2024 – 2031F)
Automation and the Internet of Things (IoT) play significant roles in indoor farming to drive the growth in the forecast period. Sensors monitor plant health, nutrient levels, and environmental conditions, while automated systems adjust settings as needed. It reduces labor costs and ensures optimal growing conditions, thus, appealing to the farmers and urban growers.
AI and data analytics are increasingly being used to optimize indoor farming operations. They analyze data from sensors and other sources to predict plant needs, optimize resource usage, and increase yields.
In July 2024, iFarm, which is a technology company enabling IT driven farming in controlled environments notified the commencement of construction of the vertical farm with its technologies in Switzerland. Based on the iFarm StackGrow technology, this robotic farm will start operations in summer 2025. The vertical farm will have a 1,031 m² cultivation area, and will produce green crops, amounting to several tons of ultra-fresh greens each month.
Report Scope
“Indoor Farming Technology Market Assessment, Opportunities and Forecast, 2017-2031F”, is a comprehensive report by Markets and Data, providing in-depth analysis and qualitative and quantitative assessment of the current state of global indoor farming technology market, industry dynamics, and challenges. The report includes market size, segmental shares, growth trends, opportunities, and forecast between 2024 and 2031. Additionally, the report profiles the leading players in the industry, mentioning their respective market share, business models, competitive intelligence, etc.
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